OMAHA, Neb. Billionaire Warren Buffett says Europe will have a hard time resolving its fiscal problems because of the structure of the European Union and this weekends election results in Greece and France.
But he added that the turmoil in Europe wont keep him from investing. Buffett said Berkshire added to its stakes Monday in two U.S. companies.
I think the worst mistake you can make in stocks is to buy or sell based on current headlines, Buffett said. He did not identify the two companies.
Buffett appeared on CNBC on Monday morning, two days after meeting with more than 30,000 people at Berkshire Hathaway Inc.s annual meeting.
Berkshires chairman and CEO said Europe has got a lot of problems. Theyll solve them, but not without a lot of pain.
Buffett said part of the challenge is that the European Unions 17 countries dont have similar monetary policies. He said its not surprising that people in Greece and France voted against the pain of austerity.
He said he wouldnt hesitate to buy a European business if he found an attractive one to add to Berkshires portfolio of more than 80 companies, including the Burlington Northern Santa Fe railroad, Geico insurance and MidAmerican Energy.
Buffett said American banks are in much better financial shape than European counterparts because of measures taken during the financial crisis. He said the United States already injected more capital into its banks and forced them to clean up their balance sheets.
Buffett said the United States did a better job imposing austerity measures and improving its fiscal situation after the financial crisis of 2008. But he says the United States had a better structure to deal with the problems.
We have a whole different banking system in the United States. Plus, we have our own currency, he said.
But Buffett said he avoids buying into businesses such as Facebook because its too hard to estimate what they might be worth.
Buffett said he doesnt really have an opinion about Facebook and Google because its hard to determine their value and how they will fare in the future.
Im an agnostic on a company like Facebook. Anytime you get a truly extraordinary business and its obvious its an extraordinary business theyre the hardest ones to value, Buffett said.
Over the weekend, Buffett also told Berkshire Hathaway shareholders that initial public offerings are almost always bad investments. He says there is so much hype involved that IPOs wont be the most-attractive value.
He says investors should be looking for good businesses to buy and trying to determine how those companies will fare in 10 years.